Bridges Weekly Trade News Digest • Volume 9 • Number 25 • 13th July 2005
G8 Agrees On Aid, Trade - But Is It Enough?
Leaders of the industrialised G8 countries concluded their annual summit on 8 July by vowing to both "substantially" reduce trade-distorting domestic farm support and eliminate agricultural export subsidies by "a credible end date." They also reached an accord on addressing climate change (see related article, this issue), and promised to increase aid to developing countries. That very day in Geneva, however, WTO Director-General Supachai Panitchpakdi warned that the ongoing Doha Round trade negotiations — in which farm subsidies feature high on the agenda — are "in trouble."
Trade prominent in development-focused summit discussions
UK Prime Minister Tony Blair, who holds the current presidency of the G8, set the agenda of the 6-8 July summit in Gleneagles, Scotland, to focus on poverty in Africa and climate change. The highlight of the gathering, which took place in the shadow of the 7 July terrorist bombings in London, was a pledge from G8 member states — the UK, France, Russia, Germany, the US, Japan, Italy and Canada — to boost development aid by USD50 billion by 2010. Half of these additional funds are to be directed to Africa. The leaders also agreed to eliminate debts owed by the eighteen Heavily Indebted Poor Countries.
Trade was also part of the G8 leaders’ strategy for tackling poverty. During the summit, they met with their counterparts from the so-called G-5 of large developing economies — Brazil, China, India, Mexico and South Africa. They also met with Director-General Supachai Panitchpakdi. Officials attending the meeting noted that the heads of state seemed determined to move the Doha Round negotiations forward. Even French President Jacques Chirac, whose government has been hesitant to embrace agricultural liberalisation, was reported to have seemed eager for progress in the talks.
Ag support, export subsidies receive particular attention
According to the communiqué the G8 leaders issued at the end of the meeting, "a successful conclusion to the WTO Doha Development Agenda would be one of the most effective ways to generate economic growth, create potential for development and raise living standards across the world."
"In agriculture, we are committed to substantially reducing trade-distorting domestic support and substantially improving market access. We are also committed to eliminating all forms of export subsidies and establishing disciplines on all export measures with equivalent effect by a credible end date."
After the conclusion of the summit, Blair said his "preference would have been to have a date [for ending agriculture subsidies]." However, he expressed a belief that it would be possible to announce such a date at the WTO’s Hong Kong Ministerial Conference in December. Earlier on 7 June, US President George Bush stated he hoped to "work with the EU to rid our respective countries of agricultural subsidies" by 2010.
The G8 leaders also stated they were "committed to opening markets more widely to trade in non-agricultural products, expanding opportunities for trade in services, improving trade rules and improving customs and other relevant procedures to facilitate trade. In this spirit, we also reiterate our commitment to the objective of duty-free and quota-free market access for products originating from LDCs."
Said EU Trade Commissioner Peter Mandelson: "I feel we should be encouraged by the fact that the G8 is focusing in such a progressive way on trade negotiations, and putting such a focus on the development element of that."
Sceptics charged that the G8 did not go far enough. The Global Call to Action against Poverty, an international alliance of civil society organisations that had been lobbying for increased aid and debt relief as well as trade justice, compared the promises of increased aid by 2010 to "waiting 5 years before responding to the tsunami." The group described the debt forgiveness promise as a step in the right direction, but said that it needed to be expanded.
Words of warning in Geneva
The confident pro-liberalisation tone of the Gleneagles communiqué bears little resemblance to the ongoing discussions at the WTO, where negotiations in most key areas of the Doha Round trade liberalisation talks are stalled. Supachai made this point in remarks to trade ambassadors upon his return from Scotland, speaking at an informal Heads of Delegation meeting on 8 July.
Draft documents released over the past week by the chairs of the agriculture and non-agricultural market access (NAMA) negotiations indicate that significant differences persist among Members. A similar assessment from the chair of the services talks also pointed to a lack of meaningful progress.
Several Geneva-based negotiators indicated that they were looking to this week’s ‘mini-ministerial’ meeting in Dalian, China, for guidance on a way out of the impasse. It remains to be seen if the government representatives who were there will be able to translate the rhetoric of Gleneagles into a boost for the faltering Doha Round.
ICTSD reporting; "Leaders Pledge to Double African Aid But Advocates Split Over Details of Plan", WTO REPORTER, 11 July 2005; "G-8 Vows ‘Substantial’ Cuts in Ag Support End to Export Subsidies, But Set No Deadline", WTO REPORTER, 11 July 2005; "Blair to push forward on climate and trade reform", THE GUARDIAN, 11 July 2005. "One small step at Gleneagles", THE GUARDIAN, 10 July 2005; "G8 mood and Doha talks ’show disconnect’", FINANCIAL TIMES, 9 July 2005; "Gleneagles Communique", G8 GLEANEAGLES 2005, 8 July 2005; "Supachai: ‘These negotiations are in trouble’" WTO PRESS RELEASE, 8 July 2005; "WTO Ag Chair Downbeat on Prospects For ‘First Approximation’ Text Deal in July", WTO REPORTER, 7 July 2005.